Shares of Tata Consultancy Services (TCS) rose 2% to 3,773 rupees on BSE during Monday’s intraday trading in an otherwise weak market after the information technology consultancy and software company ( IT) set February 23, 2022, as the record share buyback date. By comparison, the S&P BSE Sensex was down 2.3% at 56,840 at 9:36 a.m.
“The Company has fixed Wednesday, February 23, 2022 as the record date for purposes of determining the entitlement and names of shareholders who will be eligible to participate in the redemption,” TCS said in an exchange filing on Saturday.
The TCS Board of Directors on 12 January 2022 had approved the repurchase of up to 40 million shares with a nominal value of Rs 1 each at Rs 4,500 per share for an aggregate amount not to exceed Rs 18,000 crore of Rs. The amount is 12.5% higher than the historical redemption.
Shares of TCS have outperformed the market since the announcement of the takeover, falling 4%, compared to a 6% decline recorded by the S&P BSE Sensex. So far in calendar year 2022, the stock has been flat, versus a 2% drop from the benchmark.
TCS continued to see strong demand as key themes, such as cloud modernization, connected enterprise and product innovation, customer experience and digital workplace transformation, gained traction. It signed deals worth $7.6 billion in the third quarter, with an order-to-bill ratio of 1.2x, Emkay Global Financial Services analysts said in quarterly earnings update of December.
Management said the number of deals remained well balanced across deal sizes in the third quarter, with the strongest deal pipeline. Management remains confident of delivering double-digit revenue growth in FY22 given healthy deals/deal pipeline and broad-based growth, brokerage firm said with continued the “buy” rating and the target price of 4,150 rupees per share.